From DAI to USDS: Understanding Maker Protocol Evolution
How Maker evolved from CDP-based DAI to the rebranded Sky Protocol with USDS — and what it means for DeFi.
The Original DAI
DAI launched in 2017 as the first decentralized stablecoin. Users lock ETH (and later other assets) as collateral in Maker Vaults to mint DAI, maintaining a 1:1 peg to USD through overcollateralization.
Multi-Collateral DAI
Initially backed only by ETH, DAI expanded to accept WBTC, stETH, real-world assets, and eventually USDC. This diversification improved stability but introduced centralization concerns.
The Sky Protocol Rebrand
In 2024, MakerDAO rebranded to Sky and introduced:
- USDS: New stablecoin replacing DAI (DAI remains usable)
- SKY: New governance token (replacing MKR for some functions)
- SubDAOs: Specialized DAOs for specific functions (lending, RWA, etc.)
DAI vs USDS
- DAI: Still exists, still works, widely integrated across DeFi
- USDS: Enhanced version with Sky Protocol features and savings rate
- Convertible: DAI and USDS are convertible 1:1 through the Sky interface
Savings Rate
The DAI/USDS Savings Rate (DSR) lets holders earn yield by depositing into the savings contract. Rates have fluctuated between 5-15% depending on protocol revenue and governance decisions.
Real-World Assets
A significant portion of DAI/USDS backing now comes from US Treasuries and other real-world assets. This generates substantial revenue for the protocol but introduces traditional finance dependencies.
Trading on Alkizen
Swap to DAI or USDS from any token on any chain through Alkizen. Both stablecoins are widely available across EVM chains.